NY attorney general investigating bitcoin exchanges

New York Attorney General Eric Schneiderman launched an investigation into bitcoin exchanges today, his office announced. He’s looking into thirteen major exchanges, including Coinbase, Bitfinex and Gemini Trust, requesting information on their operations and what measures they have in place to protect consumers.

“Too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms,” Schneiderman said in a statement.

Schneiderman’s office sent detailed questionnaires to the thirteen exchanges, asking them to disclose who owns and controls them, and how their basic operation and transaction fees work.

The questionnaire also asks for specific details on how exchanges might suspend trading or delay orders, indicating Schneiderman is particularly concerned with exchanges manipulating the timing of public orders.

The investigation will attempt to shed more transparency on how platforms combat market manipulation attempts and suspicious trading, as well as bots, theft, and fraud.

Many of the exchanges Schneiderman is targeting, such as Beijing-based Huobi, have headquarters located outside the US, but the attorney general has jurisdiction over any foreign business operating in New York.

Exchanges have been subject to plenty of glitches, robberies, and more. In February, some Coinbase users noted that they were getting double charged for legitimate transactions and their accounts were being emptied, which resulted in overdraft fees.

Mt. Gox, a bitcoin exchange in Japan, infamously had all of its bitcoin slowly drained out of its accounts by a hacker and had to file for bankruptcy in February 2014 as a result.

Congress has held a hearing with Coinbase and think tank Coin Center to gain more of an understanding of the topic, and the SEC issued subpoenas to cryptocurrency companies and individuals in February.

In upstate New York, one city banned cryptocurrency mining, while an upstate power authority raised electricity bills for miners.

Related articles

When the government auctioned nearly 30,000 Bitcoins on Friday 27th June 2014, many bidders were looking for a bargain, hoping to buy the virtual currency at a discount and flip it later for a short term profit. But the winner, the venture capitalist Tim Draper, is not seeking a quick hit. Instead, through a partnership […]

Bitcoin exchanges allow you to transfer fiat currencies, such as the USD, into bitcoin or vice versa. Some platforms also allow bitcoin to be exchanged with other digital currencies. They are market makers that typically charge fees or take the bid/ask spreads as transaction commissions for their services Bitcoins can be bought and sold with […]